Daily Market Outlook, June 17, 2020

<h2><span>Daily Market Outlook, June 17, 2020 </span></h2>
<p><span><strong>Equity markets were mixed during the Asian market session after chalking significant gains yesterday boosted by a strong rebound in US retail sales as well as the Federal Reserve’s announcement that it would buy individual corporate bonds and President Trump’s proposal of a $1trn infrastructure initiative</strong>. A number of reasons may have injected a degree of caution in markets including concerns about rises in Covid-19 cases in Beijing and parts of the US, border skirmishes between China and India, and growing tensions on the Korean peninsula. Japanese trade data showed exports falling more than expected by 28.3% in the year to May, the biggest decline since 2009.</span></p>
<p><span><strong>UK CPI inflation data were released earlier this morning</strong>. The report showed headline CPI falling further below the Bank of England’s 2% target to 0.5% in May from 0.8% in April, in line with our forecast. The core measure (excluding food and energy) fell for a third straight month, by a bit more than expected to 1.2% from 1.4%. The figures come ahead of tomorrow’s BoE policy announcement at midday in which we expect the MPC to announce a £100bn increase in the QE envelope to a total of £745bn with risks skewed to a bigger extension. Interest rates are expected to remain at 0.1%.</span></p>
<p><span><strong>Eurozone May CPI inflation will also be released today</strong>, but they will be the final numbers and are expected to confirm the preliminary ‘flash’ estimate showing a fall in the headline annual rate to just 0.1%. Annual core CPI (excluding food and energy) is expected to be confirmed at 0.9%, unchanged from April, although it has fallen from 1.3% at the end of last year. The bulk of the fall in overall inflation in recent months has been through lower energy prices.</span></p>
<p><span><strong>US focus will be on May housing data and the second day of Fed Chair Powell’s testimony to Congress</strong>. Expect a strong rises in housing starts and permits of 20% and 14% respectively after sharp declines in previous months. Yesterday’s NAHB survey showed the homebuilder confidence index jumping up 21 points in June to 58. Chair Powell is likely to repeat his core message to the House today. At the Senate yesterday, he noted that there is a long way to go to reverse the damage caused by the pandemic. Separately, the Fed’s Mester (voter) speaks this evening on the policy response to Covid-19.</span></p>
<p><span><strong>Early tomorrow, May UK inflation is expected to show a further decline in annual CPI inflation to 0.5%</strong> (from 0.8% in April). The drop is principally due to lower energy prices but ‘core’ inflation has also moderated and is below the 2% target.</span></p>
<h3><b>Today’s Options Expiries</b><span> for 10AM New York Cut (notable size in bold)</span></h3>
<ul>
<li><span>EURUSD: </span><span>1.1250-60 (600M), 1.1275 (230M), 1.1300 (824M), 1.1325 (861M)</span></li>
<li><span>USDJPY:</span> <span>107.00 (220M), </span><b>107.25 (1.1BLN)</b><span>, 107.50 (360M), 108.30 (300M)</span></li>
</ul>
<h3><span>Technical &amp; Trade Views</span></h3>
<p><b>EURUSD Bias: Bullish above 1.1170 Bearish below</b></p>
<p><span>From a technical and trading perspective, as symmetry swing support at 1.1170 supports there is a window for fresh demand to take prices higher again to retest cycle highs above 1.14 enroute to an ultimate retest of year to date highs at 1.15. However, it is noteworthy that the daily volume weighted average price has flipped bearish as such a failure to hold support at 1.1170/50 would open a deeper corrective phase to rest bids back to 1.10 UPDATE yesterday’s close flipped the daily chart bullish supporting the upside bias </span></p>
<p><img class="aligncenter size-full wp-image-45429" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.05.42.png" alt="" width="2144" height="1233" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.05.42.png 2144w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.05.42-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.05.42-1024×589.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.05.42-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.05.42-1536×883.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.05.42-2048×1178.png 2048w" sizes="(max-width: 2144px) 100vw, 2144px" /></p>
<p><b>GBPUSD Bias: Bullish above 1.24 Bearish below</b></p>
<p><span>GBPUSD From a technical and trading perspective, reversal from the 1.28 test last week has gathered steam and now looks poised to test the major ascending trendline support sighted at 1.24, if renewed bids develop here look for a retest of 1.26 from below. A failure to defend the trendline support would be a bearish development opening a move to 1.2250 as the interim downside objective</span></p>
<p><img class="aligncenter size-full wp-image-45428" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.06.44.png" alt="" width="2151" height="1238" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.06.44.png 2151w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.06.44-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.06.44-1024×589.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.06.44-768×442.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.06.44-1536×884.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.06.44-2048×1179.png 2048w" sizes="(max-width: 2151px) 100vw, 2151px" /></p>
<p><b>USDJPY Bias: Bearish below 1.08 targeting 1.06</b></p>
<p><span>USDJPY From a technical and trading perspective, sharp rejection above 109.50 suggests a return to range trade and a retest of support back to 107 UPDATE target achieved as 108 caps upside attempts bears will play for a test of year to date lows to 106 </span></p>
<p><img class="aligncenter size-full wp-image-45430" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.07.10.png" alt="" width="2149" height="1235" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.07.10.png 2149w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.07.10-300×172.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.07.10-1024×588.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.07.10-768×441.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.07.10-1536×883.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.07.10-2048×1177.png 2048w" sizes="(max-width: 2149px) 100vw, 2149px" /></p>
<p><b>AUDUSD Bias: Bearish below .6900 Bullish above)</b></p>
<p><span>AUDUSD From a technical and trading perspective, after the rejection from above the .7050 level and the subsequent failure to hold .6900 as support, anticipate a test of the corrective equality objective back to .6650. Only a close back through .6910 would reignite bullish spirits suggesting the current correction is complete opening another run to test offers and stops above .7050</span></p>
<p><img class="aligncenter size-full wp-image-45431" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.09.53.png" alt="" width="2150" height="1240" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.09.53.png 2150w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.09.53-300×173.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.09.53-1024×591.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.09.53-768×443.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.09.53-1536×886.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-17-08.09.53-2048×1181.png 2048w" sizes="(max-width: 2150px) 100vw, 2150px" /></p>
<p><i><span>Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.</span></i></p>
<p><i><span>High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 70% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.</span></i></p>
<p>The post <a rel="nofollow" href="https://blog.tickmill.com/uncategorized/daily-market-outlook-june-17-2020/">Daily Market Outlook, June 17, 2020</a> appeared first on <a rel="nofollow" href="https://blog.tickmill.com">Tickmill</a>.</p>